Wall Street Pulls Off Stunning Comeback

Dow Gains Almost 300 Points After Earlier 320-Point Drop; Stimulus Plan Negotiated On The Hill

(CBS/AP)  Wall Street pulled off a stunning comeback Wednesday, surging higher in late trading and wiping out what looked to be yet another precipitous decline. The Dow Jones industrials, down more than 323 points in earlier trading, ended the day with an advance of just under 300 points, according to preliminary calculations.

While such volatility has become a hallmark of Wall Street's performance in recent months amid the ongoing housing and credit crisis, analysts saw some positive signs in the day's trading.

"There does come a point and time when the market itself recognizes that it got out of hand, and that is when bargain-hunters can come in," said Peter Cardillo, chief market economist at Avalon Partners.

Recession worries continued to make the markets highly volatile.

"I refer to the economy like a 'cat on a hot tin roof.' That it's used up 8 of its 9 lives. Meaning if it falls, it's not gonna land on its feet," Stuart Hoffman, an economist at PNC Bank, told CBS News correspondent Anthony Mason.

Merrill Lynch offered a bleaker outlook, predicting "the worst consumer recession since 1980" and forecasting that house prices could fall 15 percent this year and another 10 percent in 2009, reports Mason.

The Fed's decision Tuesday to lower its federal funds rate by 0.75 percentage point to 3.5 percent has been met with some skepticism, but it gave intrepid investors Wednesday a reason to buy the severely dented stocks in the financial sector.

"You might say this is a belated reaction to what the Fed did this week, compounded by hopes for the Fed to do more next week," Cardillo said. Traders who bet on the Fed's target fed funds rate were pricing in on Wednesday a 100 percent chance of a 0.50 percentage-point cut by the central bank when it meets next week.

Rate cuts will eventually boost margins for banks and other lenders, which have been working to lower costs and boost cash levels through layoffs and stock sales. Those companies - like Citigroup Inc., Washington Mutual Inc. and Merrill Lynch - were the big winners Wednesday.

Moreover, the billions of dollars in mortgage-related losses suffered by the financial companies contributed to months of selling on Wall Street.

"The early leaders in a market recovery tend to be banks, REITs (real estate investment trusts) and homebuilders, as these are the groups that typically would benefit first from a turnaround. And those have been the market leaders this week," Goldman said. "What has happened is the Fed is flooding the system with liquidity and eventually we should see some traction in the economy. And stocks tend to respond first."

The Dow Jones industrial average rose 298.98, or 2.50 percent, to 12,270.17.

Broader stock indicators also surged. The Standard & Poor's 500 index rose 28.10, or 2.14 percent, to 1,338.60, while the Nasdaq composite index rose 24.14, or 1.05 percent, to 2,316.41.

Meanwhile, Top House leaders and Treasury Secretary Henry Paulson Wednesday tallied the cost of measures to jolt the U.S. economy out of its slump as the three sought a swift bipartisan deal on a recovery package that could move through Congress within weeks.

The leader of the House of Representatives, Speaker Nancy Pelosi, a Democrat, and Minority Leader John Boehner, a Republican, are taking the lead in congressional negotiations, with the centerpiece of the measure expected to be a tax rebate similar to, but bigger than, the $300-$600 checks sent out in the summer of 2001. The two huddled for a lengthy meeting with Paulson, President George W. Bush's point man on the package, and planned another gathering this afternoon.

"We looked at a lot of different options," Boehner told reporters, adding that the threesome reached "no conclusions or agreements." He said it would "require a great leap of faith" from both parties to find common ground.

Senior lawmakers in both parties met on Tuesday with Mr. Bush, who has proposed a stimulus plan worth about $150 billion. Combined with Iraq war costs and decreasing corporate tax revenues because of the economic slump, a package that size would more than double last year's deficit spending of $163 billion, according to new congressional budget estimates.

Mr. Bush expressed optimism that his administration can reach quick agreement with Congress.

"I believe we can find common ground to get something done that's big enough, effective enough so that an economy that is inherently strong gets a boost - to make sure that this uncertainty doesn't translate into more economic woes for our workers and small business people," Mr. Bush said Tuesday.

Pelosi, Boehner and Paulson are working on hammering out details. Senate leaders Harry Reid, a Democrat, and Mitch McConnell, a Republican, have agreed to stand back and let the House take the lead in the talks with the administration.

In the Senate, Reid said in an interview, "There are too many cooks in the kitchen. Send something over to us and we'll try to move it as quickly as we can."

Perhaps the most important obstacle to overcome is differences of opinion over who should receive rebate checks. Potential disagreements between the president and Congress: Democrats want rebates for working Americans who don't pay income taxes and no benefits for high-income earners, reports CBS News senior White House correspondent Bill Plante.

Thus far, talks have focused on setting the parameters of a bill combining rebates with Republican-sought tax breaks for businesses, as well as Democratic-backed help for the unemployed and those on food stamps.

Talks continued as the nonpartisan Congressional Budget Office, citing the weakening economy, estimated that the budget deficit for the current year will jump to about $250 billion. That figure does not reflect at least $100 billion in likely additional red ink from the deficit-financed economic stimulus measure.

Senate Budget Committee Chairman Kent Conrad, a Democrat, said the 2008 deficit would reach more than $350 billion once the costs of the impending stimulus bill are factored in.

Both sides have seemed to negotiate in good faith. Republicans and Mr. Bush declined to insist on extending Bush's 2001 and 2003 tax cuts that expire in three years, while Democrats offered up tax breaks for business and limited their roster of spending proposals. Democrats also agreed to waive budget rules requiring tax increases to finance the measure.

[dredre2k]

Wow, our economy is really unstable... one minute it''s up 400 points and down 300? Do you really want to put your money into a system this unstable? Only the big players are winning in our market. How are oil stocks doing? Well i''m sure since they''ve been gouging the country for the past few years?

[missingamerica]

"Rate cuts will eventually boost margins for banks and other lenders, which have been working to lower costs and boost cash levels through layoffs and stock sales. Those companies - like Citigroup Inc., Washington Mutual Inc. and Merrill Lynch - were the big winners Wednesday."

I wonder how many Americans will realize that the above paragraph is the most important one in the entire story - and the primary driver behind everything this Administration does?

[Renegade.Rivers]

These 2 men single handedly rescued America from terrorists and you want to Impeach these Hero''''''''s.

What an un-patriotic thing to do you ungrateful Americans - wait - you call yourselves Americans?

Rock on Bush/Cheney 08!

Posted by watcher269

You must have got a real good dose of that koolaid this morning. Bush never saved our country from anything, your a liar, and I am calling you on it. I am so tired of watching and hearing such blatant lies. Your about as aware of what is really happening in the world, as a mushroom.

The time has come for liars like you to be singled out, and shown to be the fools you really are, and encouraged to get your heads out your a$$e$, and smell the deep stink that has covered our land since the 2000 elections, when they were stolen by Bush and company.

[king77shaw]

DO SOMETHING AND SEND CORPORATE AMERICA A MESSAGE ! ...

1) CANCEL YOUR CABLE TV: let the corporate media moguls (and their advertisers) know that you will no longer pay for their propaganda ..

2) STOP INVESTING YOUR MONEY ON WALL ("WAR") STREET: corporate America is selling out the middle class to the lowest global bidder and using our own money to do it; the financial markets will push for anything that increases profits - especially war .. best to invest your money in land, real estate, gold and silver%u2026

3) SUPPORT LOCAL ECONOMIES !
- Buy from local manufacturers, local retailers, local craftspeople/artisans, etc.
- if possible, BURN WOOD for heat;
- support local growers or grow some of your own food;
- implement alternative energy sources (solar, hybrid autos etc ..)
- develop local means of commerce not based on the failing US dollar ..

4) STOP UNNECESSARY CONSUMPTION & STOP USING YOUR CREDIT CARD ! think twice about what you buy; is it absolutely necessary ? who does it ultimately support ?

5) DECENTRALIZE ! - the global economy is nothing more than a ploy to centralize power, control and wealth into the hands of an elite few - blinded by misinformation, the American people are buying right into it - the rich get richer and the middle class is quickly becoming the working poor ...

[walt1944-2009]

Wall Street and the World Markets are "recovering" from the big drops this week thanks to "talk" about the US(SA) government doing something to stop the recession (temporarily!).

Corporate America is breathing easier now that it appears that the highly paid corporate executives will continue to enjoy their extra-large salaries, bonuses, and perks, Corporate America will continue to post large profits, and stockholders will be getting larger dividends! All in anticipation of $800 per person (with exceptions, naturally!) as ORDERED by the Great Emperor Bush II.

So, now all is right with the world and the neocons can continue to "gut" this country by allowing the middle class to disappear, continue to lose jobs to Asia, India, and Europe, and continue to allow BIG BUSINESS to "gouge" the consumer by charging bogus high prices and posting record profits!

HOWEVER, the DEPRESSION is still coming, and all those out there who have a lot of money saved up in numerous bank accounts had better hang on to it. When the dollar becomes as worthless as the tissue paper it is printed on, you will need every last dollar of your savings to buy a single loaf of bread!

THANK YOU NEOCONS AND THE FASCIST REPUBLICAN PARTY!!!

SIG HEIL, BUSH!!!

[skyk-2009]

See, it is division like this that is ruining America. Like Bush said - "you''''re with us - or you''''re against us".

Sounds like you''''re against us!

Stand up for you country and your President!




--------------------------------------------------------------------------------

Posted by watcher269 at 04:31 AM : Jan 24, 2008
+ report abuse

Well I''m against anyone who will lie like Bush and his people did to start a war, run this nation into debt with it and KILL thousands of our best and brightest! LIES and LYING is never a good thing and I am NEVER going to be on the side of a person who LIES to get us into a war... a war that has NOTHING to do with our security. Sorry! Combat Vet, USMC, 1968

[slim1h2o]

We''ll see what happens today. Is it going to go up, or is it going to go down.

Ya never know!

[watcher269-2009]

Go hide your GOP head in the sand again. Maybe it''''ll just go away.

Posted by gce65

---------------

See, it is division like this that is ruining America. Like Bush said - "you''re with us - or you''re against us".

Sounds like you''re against us!

Stand up for you country and your President!

[gce65]

watcher269:
Bush/Cheney RESCUED America from terrorists???

Where were you on 9/11? Out of town or something? IT HAPPENED ON THEIR WATCH! And it happened despite being told repeatedly by the outgoing intelligence people from the previous administration that BinLaden and his group were the number one threat to national security. What was the title of the national security brief Condie Rice brought before the 9/11 commission entitled? BinLaden Determined to Strike Inside US? All the predictions were in there.
But from day one in the Oval Office Bush/Cheney and the neocons were obsessed with Iraq, which had nothing to do with it.
Even after 9/11 Bush/Cheney FAILED to capture or kill BinLaden or anyone high up in al-Qaeda because they OUTSOURCED military offensive at the Tora Bora caves to local Afghans and pulled US troops out fight in their new fabricated war in Iraq.
So today nearly 80% of the world''s opium comes from Afghanistan, BinLaden and the Taliban are coming back (Bush just had to send 3000 Marines back into Afghanistan) and Iraq just sucks us dry for money.

Go hide your GOP head in the sand again. Maybe it''ll just go away.

[alphaa10-2009]

watcher269 said, "It is a free market - you are free to buy any stocks you want to buy."
---
Is that what you believe "free market" means? You need to have a long talk with your broker, or somebody, soon...

That is not what "free market" means-- does the name Adam Smith bring you any ideas? The idea markets will reach equilibrium, eventually, no matter how many bodies pile up in the streets?

The point is this brutal reckoning with Wall Street and its irrational (greedy) ways was what Bernanke did NOT allow to happen. The Fed manipulates the market to ensure those Too Big to Fail do not get hurt. Failure might upset the wrong people, who can pull many strings, politically.

Again, the American financial market is a game managed for the interests of its power players-- not by the rules it ostensibly honors. The players care least of all for the interests of the United States of America and its people-- ask the victims of the WorldCom or Enron scams.

[watcher269-2009]

A lot of people are talking about holding Bush/Cheney accountable for treasonous behavior.

Posted by gce65

---------------------

These 2 men single handedly rescued America from terrorists and you want to Impeach these Hero''''s.

What an un-patriotic thing to do you ungrateful Americans - wait - you call yourselves Americans?

Rock on Bush/Cheney 08!

[alphaa10-2009]

gce65 said, "Why no news of the Center for Public Integrity report exhaustively documenting 935 falsehoods Bush and his cronies told in the lead-up to and surrounding the start of Iraq war? Wa Post and ABC are covering it. Apparently you ran it yesterday but quickly took it down... "
---
Shhhhhh! The page editors for cbsnews.com are a little sensitive about that.

It so happens, the CEO of CBS is a registered GOP bozo, and doesn''t want to embarrass Bush with reports pointing out his naked, prevaricating posterior-- and that of his President of Vice, Richard Cheney.

But, seriously, keep those questions coming, folks! We enjoy hearing from you!

* Shhhhhh!2 -- The corollary is not to expect any serious political investigation from CBS while Moonves keeps his finger in the **** for Bush. Especially after all the fracas about Rather, and his forced resignation. Besides, all this ugliness about deceiving the American people with almost five years of war and hundreds of thousands of Iraqi and American lives-- all for oil. It''s just too big a scandal for CBS to handle properly.

[watcher269-2009]

So, never let any GOP bozo tell you America is a free market economy. America is a market managed by its richest players for their own benefit. The GOP mantra about free markets is utterly theadbare, and the hypocrisy goes back decades.

Posted by alphaa10

---------------

It is a free market - you are free to buy any stocks you want to buy.

Mr. Bush can influence the power players to boost the economy and he has. He kept his word - AGAIN!

Rock on Bush!

[gce65]

The DOW drops more than 2000 points over a couple of months and all you report today is "wall street pulls off stunning comeback?"
Has it actually come back? Still looks a little low to me. The only pulling off seems to be what you''re trying to do to the public--and prematurely at that.

[gce65]

Wow! It''s up! It''s down! It''s a wild ride! Such is life in the Bush economy. I harken back to the good old days under Clinton of balanced budgets, a national SURPLUS and steady market growth, even if it was over-inflated.

Are you all paying close attention to the stock market? Meanwhile in other matters of basic checks and balances...

CBS:
Why no news of the Center for Public Integrity report exhaustively documenting 935 falsehoods Bush and his cronies told in the lead-up to and surrounding the start of Iraq war? Wa Post and ABC are covering it. Apparently you ran it yesterday but quickly took it down? What''s up with that?

http://www.publicintegrity.org/WarCard


A lot of people are talking about holding Bush/Cheney accountable for treasonous behavior. I agree.
Rep. Robert Wexler (D-FL) has gathered around 225K signatures from an online petition asking for congressional hearings into Cheney''s behavior as possible grounds for impeachment. He only needed 50K signatures, but got almost 5X as many as needed. Still, Rep. JOHN CONYERS (D-MI) is chair of the House Judiciary Committee and is holding things up.
Please contact him at either of these 3 locations if you''d like him to proceed:

2426 Rayburn Building
Washington, DC 20515
[phone]
[phone] Fax

2615 W. Jefferson
Trenton, MI 48183
[phone]
[phone] Fax

669 Federal Building
231 W. Lafayette
Detroit, MI 48226
[phone]
[phone] Fax

[alphaa10-2009]

t_barr-- Interesting points, but you obstruct your delivery by posting in normal sequence, 1,2,3, etc. Instead, post in reverse order, 9,8,7, etc. because the latest post goes to the top.

Also, most readers will not have the interest / ability to take in all your points. Rather than a densely-packed manifesto, distill your points to maybe a "Top Ten"-- and for a three-paragraph post, that is still pushing the 1500-word limit.

My comments are not directed to your content, but strictly about delivery. I hope these suggestions are useful to your ideas.

[alphaa10-2009]

watcher269 said, "See, Mr. Bush was right again! Look at the market Re- Bound! Mr. bush knows his economics!"
---
Wrong... again. Bush had nothing to do with the habitual policy of Bernanke and the Fed-- all he knows is he''d like Ben to reassure his friends on Wall Street. Like, throw lots of money at their problem...

Curiously, their problem is directly the result of Wall Street''s "irrational exuberance"-- also known as greed and white-collar crime.

Nonetheless, what Bernanke did was pure Keynesian market manipulation. And to think you might suspect Bush of such liberal thought patterns-- or any thought patterns whatever. You ought to be ashamed!

In contrast to Bernanke, conservative economists of the Chicago School of Economic Darwinism would have said, "Piffle on them all! They can''t expect to thrive when they sell junk securities, can they? Where is Principle, when we need him most?"

So, never let any GOP bozo tell you America is a free market economy. America is a market managed by its richest players for their own benefit. The GOP mantra about free markets is utterly theadbare, and the hypocrisy goes back decades.

[watcher269-2009]

See, Mr. Bush was right again! Look at the market Re- Bound! Mr. bush knows his economics!

Go Bush!

[kaliveotin]

A few of us, apparently very few, knew that we would pay dearly for the Bush giveaway to the Very rich and the Military industrial complex War Machine sooner or later. Along with the benifits enjoyed by the banks, insurance and energy companies, and medical corporations............, WE HAVE BEEN BLED DRY. The media and congress do not understand how bad our situation is. We need to establish INDUSTRY again in the United States. Service and government workers will not be able to support a nation spending huge amounts of resources overseas. The Democrats plan to grow a new-century energy industry would be a good start. Out-lawing adjustable credit and mortgage rates is necessary. The giant corporations which were built on the blood, sweat and tears of baby boomers must be made to pay for social security and the government should pick up the tab for pensions which have been earned and promised but remain unpaid or avoided. The government could be ours again, why allow liars and theives to steal our heritage?

[mcv57]

Posted by t_barr

Send a copy to the White House and your senator.